German Business Sentiment Wanes but Fails to Spook the EUR

It was a quieter economic calendar through the European session.

Germany’s IFO Business Climate Index figures were in focus early in the session.

In August, the Business IFO Business Climate Index fell from 100.7 to 99.4. Economists had forecast a decline to 100.4.

The decline came in spite of a pickup in business sentiment towards the current situation. In August, the Current Assessment sub-index increased from 100.4 to 101.4.

Weighing on the headline number was business expectations, which fell from 101.0 to 97.5.

According to the August survey,

• In the manufacturing sector, the business climate has deteriorated noticeably. The assessment of the current situation was less positive. While companies were still satisfied with the day-to-day business, the outlook for the coming months hit reverse. The expectation indicator fell to its lowest level since November 2020.
• For the services sector, optimism with regards to the future business development has been dampened. By contrast, the companies assessed the current situation as better than in the previous month.
• Traders were less satisfied with their current business situation. Additionally, pessimism returned with regard to expectations. The retail sector was particularly concerned about the months ahead.

Market Impact

Ahead of today’s GDP figures, the EUR had risen to a pre-stat high $1.17486 before falling to a pre-stat low and current day low $1.17324.

In response to today’s stats, the EUR fell to pre-stat low $1.17335 before rising to a post-stat and current day high $1.17596

At the time of writing, the EUR was down by 0.02% to $1.17537.

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